Unemployment Benefits Essay

Submitted By tmcamp209
Words: 489
Pages: 2

Unemployment
Tina Campbell
Assignment 2-2: Unemployment
ECON220-E1WW
May 31, 2015

UNEMPLOYMENT In layman’s terms, unemployment can be defined as a person being without a job or when someone wants to work and cannot find a job. Another example of unemployment is underemployment where the employee takes a job below his/her skill level because that is all the employee can find at the time, but is continually looking for employment at his/her skill level. Economics assigns unemployment into one of three categories: frictional, structural, and cyclical. As defined by out textbook, frictional unemployment is when a worker is looking for a job or moving from one job to another. This type of unemployment is always present to some degree as workers try to better themselves looking for career improvement opportunities. It can also occur when the work factors do not match the worker, such as skills, location, seasonal, etc. Frictional unemployment is typically voluntary as workers transition from one position to the next or leave a position because they feel they are not being valued. Next is structural unemployment which occurs when the labor market cannot provide the appropriate jobs for everyone who is looking. Many times, there is a mismatch between the skill level desired and the applicants. Structural unemployment contributes to workers losing their skills ue to their inactivity. The third category is cyclical unemployment which occurs when there is simply not enough demand in the economy to provide positions for everyone that wants to work regardless of skill. In this category, the number of unemployed workers always outnumbers the number of job vacancies. Unemployment has far-reaching effects on the economy other than just unemployed workers. In addition to funding unemployment benefits to workers, those same workers will end up spending less in the economy because of the financial strain. Reduced spending, workers without…